ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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thinking at the margin
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oppourtunity cost
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markets coordinate trade
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incentives matter
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Detailed explanation-1: -A student spends three hours and $20 at the movies the night before an exam. The opportunity cost is time spent studying and that money to spend on something else. A farmer chooses to plant wheat; the opportunity cost is planting a different crop, or an alternate use of the resources (land and farm equipment).
Detailed explanation-2: -A simple example of opportunity cost is to let us suppose that a person is having Rs. 50000 in his hand and He has the option to keep it with himself at home or deposit in the bank which will generate interest of 4% annually so now the opportunity cost of keeping money at home is Rs. 2000 per year as opposed to Bank.
Detailed explanation-3: -For example, choosing public transportation to travel to a particular destination by foregoing the option of traveling in one’s own car is a good example of opportunity cost, because you end up saving money which needs to be spent on fuel.
Detailed explanation-4: -Opportunity Cost = Return on Most Profitable Investment Choice-Return on Investment Chosen to Pursue. Opportunity Cost = $80, 000 (selling ten cars worth $8, 000 each)-$60, 000 (selling 5 trucks worth $12, 000 each) Opportunity Cost = $20, 000. 13-May-2021